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OFFICE DEPOT CEO BUYS $250,000 IN COMPANY STOCKS
Neil R. Austrian bought 100,000 shares near a multiyear low.
The head of Office Depot stuffed shares into his backpack despite weak stock prices and an uncertain future for the office-supply industry.From Aug. 30 through Sep. 1, Chairman and Chief Executive Neil R. Austrian bought 100,000 shares of Office Depot (ticker: ODP) for $251,590, or $2.52 each.
This is his first transaction in almost five years. His last transaction, the sale of 100,000 shares for $4.2 million, an average of $42.09 each, took place on Oct. 25, 2006.
Following the purchase, Austrian directly holds 861,768 shares of the office-supply company, an amount that represents less than 1% of Office Depot’s outstanding shares.
Austrian was named Chairman and CEO in May. He has been an Office Depot director since 1998. Austrian was President and Chief Operating Officer of the National Football League from 1991 through 1999.
A spokeswoman for Office Depot provided the statement: "Neil is a substantial shareholder already (given the number of years he’s been on the board). As CEO, there are not many ‘open windows’ for trading, and when he had one, he used the opportunity to buy because he believes the stock has upside. It was an investment decision and he believes in the company."
On Aug. 22, Office Depot plummeted to a multiyear intraday low of $2.10; it last traded at that level in April 2009. Shares continue to hover near the low, closing at $2.29 on Friday.
On August 11, BB&T Capital analyst Anthony Chukumba rated Office Depot at Hold and lowered estimates in light of a back-to-school pricing study.
In an interview with Barrons.com, Chukumba says, "Office Depot is the number-three horse in a three-horse race in what right now is a very tough industry. Staples (SPLS) is the leader and has been for a long time."
He believes that the office-supply industry is currently structurally challenged and has remained that way despite optimism on the industry earlier this year. "The hope going into late last year and early this year is that the macro environment was improving."
Noting that office-supply stores have saturated North America, Chukumba feels that a consolidation with OfficeMax (OMX) would help bolster Office Depot. "If that happened, the two of them would gain, it would help them compete with Staples. We have been talking about it and hoping for it for a while," he says.
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